Microsoft Clarifies Rules Related to Self-Hosting

Microsoft Clarifies Rules Related to Self-Hosting

I previously presented my thoughts here regarding changes Microsoft made to its Product Terms pertaining to the Self-Hosted Applications benefit under Software Assurance.

After publishing that entry, Microsoft reached out to me to clarify that the principal effect of the change actually is to increase self-hosting rights by extending them to deployments hosted by a third-party, License Mobility outsourcer (at least for products other than Windows Server OS). Thus, companies with, for example, SQL Server licenses enrolled in Software Assurance now may use those licenses to support customer-facing software solutions under the Self-Hosted Applications benefit, and those solutions may be hosted on an outsourcer’s multi-tenant (“shared”) infrastructure, pursuant to the License Mobility benefit through Software Assurance. Previously, any self-hosting had to be accomplished either from the company’s own servers or from outsourced infrastructure that was physically dedicated in its entirety to that company (i.e., outsourcing of Self-Hosted Applications was not permitted on an outsourcer’s multi-tenant infrastructure).

The confusion arises from Microsoft’s use of the undefined term “shared servers.” The Product Terms do not clearly indicate that “shared servers” refers to an outsourcer’s infrastructure, and not to the licensee’s own infrastructure. Thus, one interpretation of the new language was that companies could not deploy Self-Hosted Applications on their own servers, if those servers were “shared” among multiple customers.

Fortunately, Microsoft has clarified that such an interpretation is not what it intended.

My recommendation to Microsoft would be to add a defined term in the “Servers – Self Hosted Applications” section of the Product Terms – perhaps at the end of the paragraph in the November 2016 document beginning “If Customer delivers the Unified Solution from shared servers…” – stating: “For purposes of this paragraph, ‘shared servers’ are Servers under the day-to-day management and control of third parties that are not fully dedicated to Customer’s use.”

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Christopher Barnett

Christopher represents clients in a variety of business, intellectual property and IT-related contexts, with matters involving trademark registration and enforcement, software and licensing disputes and litigation, and mergers, divestments and service transactions. Christopher’s practice includes substantial attention to concerns faced by media & technology companies and to disputes involving new media, especially the fast-evolving content on the Internet.